JOBS, JOBS, JOBS, THE REALITY BEHIND THE NUMBERS
According to January’s labour statistics that show unemployment levels in Thunder Bay reaching a 10-year low of 5.2% (it has since gone up to 6.1% in March), it would seem that the good times are back again and we can look forward to a prosperous future. Why then, with all these new jobs being created there are still so many signs of a weak economy?
Examples of a weak economy can be seen in new housing starts (still at very low levels in historical terms with 232 starts in 1999 vs. a high of 850 in 1987), and the high number of homes being put up for sale (2,582 in 1999). Other examples are the high number of bankruptcies and people applying for jobs (i.e. 3,000 applicants for 400 jobs at the casino).
To better understand why this is happening, we need to look at some important demographic and labour trends in the city and region and their impact on our economy. (The following information can be viewed in its entirety at http://flash.lakeheadu.ca/~strateco under NorTrends and at http://thunder-bay.hrdc-drhc.gc.ca/rpts/lmbmar00.htm)
Over the years there have been many debates over the decline or growth of Thunder Bay’s population. For whatever it is worth, the sign on the highway was finally changed to reflect a small increase. Statistics Canada 1996 census shows that the population growth of Northern Ontario between 1991 to 1996 has been much slower than in the rest of the province. While Ontario’s population grew by 6.63%, Northwestern Ontario’s population increased by only 1.48% during the same time. Northeastern Ontario was even lower at .05%.
More significant is the change in the make-up of Northern Ontario population with fewer younger people under the age of 30 (44.4% in 1991 to 41% in 1996) and an aging population (55+ increased from 20.9% in 1991 to 22.1% in 1996). The numbers for Thunder Bay Metro area are even more striking, with more people leaving the city than coming in, resulting in a net out-migration of 230 in 1995-96 and 879 in 1996-97. The majority of these people are in the 25-44 age category.
The implications of these trends for our city and region are significant. Slow population growth and aging population affects demand for health care (the average age in Thunder Bay Homes for the Aged is now 83 years versus 78 just a few years ago); college and university enrollment (down from previous years); the number of new entrants to the labour market (see below); and the number of new families (with young people leaving the region, there are less of them getting married, buying homes, having children, buying furniture etc.).
The recent low unemployment numbers would indicate that many jobs are being created. However, if we look further in the labour force survey, it is evident that this is mostly the result of a drop in the work force from 66,100 to 62,700. In other words, there were 3,400 fewer people working. Therefore, as quoted in the report "The year over year decline in Thunder Bay’s unemployment rate – 6.1% last month compared to 9.2% in March 1999 – resulted from lower levels of employment and a declining labour force rather than a stronger labour market conditions".
In conclusion, when trying to determine the number of jobs being created and the well being of our economy, unemployment rates need to be thoroughly analyzed. Other factors such as the total number of people working, and the kind of jobs being created (are they minimum wages, low paying, or high paying jobs), are just as important to know and understand in order to properly plan for economic growth (jobs) in the future.
In the next article I will discuss challenges and opportunities in job creation in the city and region.
Frank Pullia is a Certified Management Accountant and the Principal of Pullia Accounting & Consulting. He is also a member of North of Superior Training Board and the International Business Committee of the Chamber of Commerce. He can be reached at 767-6579 or via e-mail at frank@frankpullia.com